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41 Cards in this Set
- Front
- Back
Decision
pg. 196 |
a choice made from among available alternatives
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Decision making
pg. 196 |
is the process of identifying and choosing alternative courses of action.
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Rational model of decision making
pg. 197 |
also called the "classical model", explains how managers should make decisions; it assumes managers will make logical decisions that will be the optimum in furthering the organizations best interests.
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four stages of rational decision making
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1.) identify the problem or opportunity
2.) think up alternative solutions 3.) evaluate alternatives and select a solution 4.) implement and evaluate the solution chosen |
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Problems
pg. 197 |
difficulties that inhibit the achievement of goals.
example: customer complaints, supplier breakdowns, staff turnover, sales shortfalls, and competitor innovations. |
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Opportunities
pg. 197 |
situations that present possibilities for exceeding existing goals.
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Diagnosis
pg. 198 |
analyzing the underlying causes
-"how to change conditions from the present to the desirable." |
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for successful implementation you need what 2 things?
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1.) plan carefully
2.) be sensitive to those affected |
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Nonrational models of decision making
pg. 201 |
explain how managers make decisions; they assume that decision making is nearly always uncertain and risky, making it difficult for managers to make optimal decisions.
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3 nonrational models
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1.) satisficing
2.) incremental 3.) intuition |
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Satisficing model
pg. 202 |
Managers seek alternatives until they find one that is satisfactory, not optimal
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Bounded rationality
pg. 201 |
the concept suggests that the ability of decision makers to be rational is limited by numerous constraints, such as complexity, time, money, and their cognitive capacity
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Incremental model
pg. 202 |
managers take small, short term steps to alleviate a problem.
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Intuition model
pg. 203 |
"going with your gut" -making a choice without the use of conscious thought or logical inference.
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Business analytics
pg. 207 |
the term used for sophisticated forms of business data analysis.
example: portfolio analysis, in which an investment adviser evaluates the risks of various stocks. |
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Predictive modeling
pg. 208 |
a data-mining technique used to predict future behavior and anticipate the consequences of change.
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Risk propensity
pg. 209 |
the willingness to gamble or to undertake risk for the possibility of gaining an increased payoff
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Decision making style
pg. 209 |
reflects the combination of how an individual perceives and responds to information.
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four styles of decision making
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1.) directive
2.) analytical 3.) conceptual 4.) behavioral |
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Ethics officer
pg. 212 |
someone trained about matters of ethics in the workplace, particularly about resolving ethical dilemmas.
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Decision tree
pg. 213 |
a graph of decisions and their possible consequences; it is used to create a plan to reach a goal.
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Relaxed avoidance
pg. 215 |
"Theres no point in doing anything; nothing bads going to happen"
a manager decides to take no action in the belief that there will be no great negative consequences. |
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Relaxed change
pg. 216 |
"Why no just take the easiest way out?"
a manager realizes that complete inaction will have negative consequences but opts for the first available alternative that involves low risk. -form of satisficing |
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Defensive avoidance
pg. 216 |
"Theres no reason for me to explore other solution alternatives"
a manager cant find a good solution and follows by (a) procrastinating, (b) passing the buck, or (c) denying the risk of any negative consequences. -occurs in firms with high turnover |
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Panic
pg. 216 |
"This is so stressful, ive got to do somehting-anything-to get rid of the problem!"
a manager is so frantic to get rid of the problem that he cant deal with the situation realistically. |
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Deciding to decide
pg. 216 |
a manager agrees that he or she must decide what to do about a problem or opportunity and take effective decision making steps.
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3 ways to help you decide whether to decide are to evaluate the following
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1.) importance
2.) credibility 3.) urgency |
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Heuristics
pg. 217 |
strategies that simplify the process of making decisions.
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Availability bias
pg. 218 |
managers use information readily available from memory to make judgments.
example: more coverage given to aids or breast cancer than to heart disease, leading ppl to think they are bigger killers. |
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confirmation bias
pg. 218 |
when people seek information to support their point of view and discount data that do not.
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Representativeness bias
pg. 218 |
the tendency to generalize from a small sample or a single event.
example: just bc you hired a great sales rep from a particular university doesnt mean the next will be great. |
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Anchoring and adjustment bias
pg. 218 |
the tendency to make decisions based on an initial figure.
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Escalation of commitment bias
pg. 219 |
whereby decision makers increase their commitment to a project despite negative information about it.
example: War |
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Groupthink
pg. 221 |
occurs when group members strive to agree for the sake of unanimity and thus avoid accurately assessing the decision situation.
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Goal displacement
pg. 221 |
occurs when the primary goal is subsumed by a secondary goal.
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What managers need to know about groups and decision making.
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1.) they are less efficient
2.) their size affects decision quality 3.) they may be too confident 4.) knowledge counts. |
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Participative management (PM)
pg. 222 |
the process of involving employees in (a) setting goals, (b) making decisions, (c) solving problems and (d) making changes in the organization
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Consensus
pg. 222 |
occurs when members are able to express their opinions and reach agreement to support the final decision.
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Brainstorming
pg. 223 |
a technique used to help groups generate multiple ideas and alternatives for solving problems.
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Electronic brainstorming
pg. 224 |
sometimes called "brainwriting", in which members of a group come together over a computer network to generate ideas and alternatives.
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Delphi technique
pg. 224 |
is a group process that uses physically dispersed experts who fill out questionnaires to anonymously generate ideas; the judgments are combined and in effect averaged to achieve a consensus of expert opinion.
-useful in face to face discussions are impractical. |